In my previous company I used to work with 4 screen monitors(it wasn;t a gamedev co - it was far from that) and my sincere advice - anything more than 2 monitors is a pain. And yes you need a special hardware which(video card) which can accomodate 4 monitors.

And it worked for almost any windows application. You could either stretch the program to the 3 monitors or you could have programs working on different monitors.

It's commonly done in certain areas - often 'simulation' style games such as car racing, or flight simulation.

You commonly (well not commonly, but it's not that rare) find people in flight simulation (my particular forté) have 4+ screens as well as various specialist attached devices to simulate a full cockpit. Indeed some take this so far as to make a complete replica of a cockpit - I know of one setup that uses the front end of a real 727 as such (although, this level of addicition (or perhaps, the addiction isn't too rare, but the ability to throw money at it is) is fairly rare).

You can also have mulitple video cards, which usually means resorting to using PCI based cards.

As far as games go, this requires two things. First, the game must be running on video hardware that is capable of treating multiple displays as a single device (primarily Nvidia's span system for the moment). Second, the game must be specifically designed to handle extra-wide resolutions so the image will span all of the displays. This support is actually quite rare. Alternatively, the game has to be written to handle specifically rendering multiple images to different displays (which is very rare in games, and is almost exclusively limited to advanced simulators).

If you're writing a game engine from scratch, it isn't terribly difficult to write multi-display support - although it's a heck of a challenge to make it perform well. However, simply plunking down a couple of extra monitors and rigging them up to your video card won't give you panoramic displays in the majority of games. Usually you'll find that they simply render to the Windows primary display, and leave the others alone entirely.

I've played X² - The Threat on a triple-monitor display. Aside from the horrid performance strain of drawing three times as much as normal, it was a pretty cool experience, but far too much trouble to do on a regular basis. I still use a dual-monitor setup for working, but gaming is (at least for now) pretty much entirely single-screen.

I know DirectX has support for actually sending different data to individual video cards. I Star Trek:Armada 2 actually took advantage of this if you had mulitple cards. You could transfer its cinematic viewer over from as small little window on the primary card to a full screen view being handled by the other card.

I'd say that most games ignore any monitor except the primary display. I tested it using a simple OpenGL app I had made. Not changing any line of code, my full screen demo thingy went from one screen to the other when I changed the primary display. To clarify, I don't mean at run-time, rather restarting the app. My setup is with two different video cards, one Intel onboard cheap thing and my RADEON 9200. I had updated this computer with parts from another, but I couldn't take the onboard card out, so I just kept both.